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The Markets September 11, 2013
Balancing Risk with Hedge Funds?
Institutions are looking to hedge funds for risk management
and diversification, according to new research from Cerulli Associates.
Reported by Judy Faust Hartnett
The September 2013 issue of The Cerulli Edge-U.S. Asset Management Edition examines how asset managers balance risk, and provides a close look at requests for proposals (RFPs) and database teams, exchange-traded funds (ETFs) and alternative investments.
“Asset managers have refined their approach to asset allocation over the past several years to emphasize risk-based approaches,” said Michele Giuditta, associate director at Cerulli. “Using a risk-based lens, managers aim to adjust their portfolios to offset periods of extreme volatility and market stress that may affect both equity- and credit-related investments in the same ways.”
More recently, asset managers are experiencing demand for a range of hedge fund strategies—credit-related, global macro and event-driven ones in particular. Boston-based global analytics firm Cerulli believes that demand for these products should continue in the near term, given the low-interest-rate environment, ongoing global financial uncertainty, and steady merger and acquisition activity.